Which one of the following statements is a rationale for the imposition of tariffs?
A) Tariffs reduce the benefits of trade to consumers.
B) Under certain conditions, tariffs can be used to manipulate world prices.
C) Tariffs discourage domestic production.
D) Tariffs encourage exports.

Question

Quizplus · Accepted Answer

Tariffs can be used as a tool to manipulate world prices by making imports more expensive and therefore increasing demand for domestic products. This allows domestic producers to charge higher prices and potentially increase their profits. However, this can also lead to retaliatory tariffs from other countries and can harm overall trade relations.

Which One of the Following Statements Is a Rationale for the Imposition